Lotteryville, USA

s a l v o s

What would you do if you won a million dollars? Forget the revolution; this is your ticket to the Kingdom of Freedom. No matter how many hours you log in at a fast-food restaurant or behind a secretary’s desk, it’s unlikely you’ll ever save enough to buy a house or take a decent vacation, let alone get your hair and thighs to look like those of the Aaron Spelling actresses who tantalize you every Monday and Wednesday night. The classless society is happening right now, at a party at a mansion in Beverly Hills. And a lottery ticket might buy you an invitation.

In Grand Crossing, a neighborhood on the South Side of Chicago, the average monthly spending on the lottery is $60 per household. Grand Crossing lies just west of the South Shore neighborhood, home of the much-lauded community-development-oriented South Shore Bank. Jeffery Boulevard, the busy commercial thoroughfare where the Bank’s headquarters are located, is lined with thriving small businesses—hair salons, pizzerias, Black-owned clothing stores. But traveling from South Shore to Grand Crossing you pass a boarded-up apartment building, an abandoned grocery store, a deserted TV repair shop. A little bit further and you come to Stony Island Avenue. The businesses here are distinctly different than on Jeffery—there’s a Checkers, a Church’s Fried Chicken, a Burger King; a neighborhood has started to become a ghetto. Next to a shuttered bar there’s an ad for a pawn shop—“Need Cash Fast? Top Dollar for Broken Gold.” Beyond the highway that passes over the neighborhood is a sudden proliferation of storefront churches, one of which, the House of Deliverance, has obviously been abandoned. At Cottage Grove there’s a Currency Exchange and a store which advertises itself as selling liquor—and, as an afterthought, food. Beyond, there’s nothing but ramshackle buildings, no businesses as far as the eye can see. Only the passing of an occasional bus reminds you that you’re connected to the rest of the city.

Compare Grand Crossing to Bronzeville, the famous Black Metropolis described in 1945 by St. Clare Drake and Horace Cayton, with its “continuous and colorful movement” among locally-owned businesses. A neighborhood, a city, is a concentration of people, goods, money, drawn in from the hinterlands; if much of this abundance is collected only to be dispersed again, a sizable portion remains and circulates within the closed system of the city. Drake and Cayton describe the neighborhood’s policy wheels, illegal private precursors to the lottery which were run primarily by Black syndicates and helped to amass capital within the community, to make sure a few people would always have enough to support local businesses and even invest. As a way of redistributing money within the neighborhood, policy wheels didn’t work too badly. It’s not a coincidence that policy was replaced by the lottery just as the local department stores and restaurants have been replaced by Burger King.

Today a monthly average of $4.48 is spent on the lottery per household in Flossmoor, a wealthy Chicago suburb where the average income is $117,000 a year. In Posen, a poor suburb where average household income is $33,000, the monthly average is $91.82. Although people of all incomes play the lottery, it remains overwhelmingly true that lottery players, like the policy wheel players of the past, are overwhelmingly poor. But in every other way the lottery serves a wholly different function than its predecessor. On one hand, it scrapes up revenue for starved state coffers. On the other, it inoculates the urban poor with a stiff ideological dose of eternal possibility and personal mobility. The one thing it does not do is collect money for local investment. In an era when Enterprise Zones and tax cuts for businesses are all that is offered to heal the wounds of the cities, the lottery is America’s perverse way of dealing with the plight of its urban poor.

Lotteries are part of a long and vigorous tradition in American life, going back to the colonial period when they were used to amass funds for the construction of many of the hallmarks of colonial architecture—the Harvard and Yale campuses, Fanueil Hall—and even for getting supplies to Revolutionary troops. During the nineteenth century, private lotteries took in millions of dollars; the last of these, a fabulously corrupt money-making machine in Louisiana, was shut down in 1896. Yet even after the last of the legal lotteries disappeared, policy rackets continued to turn great profits, and instant sweepstakes like that of Publisher’s Clearinghouse took the place of the lottery among the law-abiding—especially when times got tough.

If the money hadn’t come from the lottery it would have to have come from somewhere else in the tax structure.

The lottery returned as a tool of public finance in the late sixties and early seventies. Today, thirty-nine states have lotteries. The Illinois operation is typical: after a few years of slow growth between 1975 and 1980 it exploded; ticket sales climbed from $98 million in 1980 to $1.5 billion in 1990. Your Illinois lottery dollar breaks down like this: about 50¢ goes back in payoffs, 40¢ goes to the Common School Fund, 5¢ goes to commissions for lottery vendors, and 5¢ goes to operating the lottery. The transfer to the school fund in 1994 was $552,111,416. An enormous sum, to be sure, but it’s an accounting fiction to say that the lottery made half a billion dollars for the school fund—if the money hadn’t come from the lottery it would have to have come from somewhere else in the tax structure. A more accurate way to put it might be to say that the lottery saved local property owners half a billion dollars in taxes.

It’s misleading to think of state revenues as absolute figures; the crucial question about state taxes isn’t whether they’re “high” or “low,” but who pays them. Since every state gets its revenue from somewhere, what matters is which part of society is expected to foot the bill, a question not of bookkeeping but politics. Tax structures, as Orange County is reminding the world, are ways of distributing financial power. Sales taxes, for example, are regressive not only because they take a more sizable cut of a poor person’s income than that of someone in the upper-middle class, but because they reduce the cumulative purchasing power of working people and hence the bargaining power workers have over the economy as a whole. The lottery is perhaps unique in that it is one of the only methods of raising revenue which applies solely to poor and working people and doesn’t affect business or property owners at all. In this it seems closer to pre-Revolutionary France, when peasants picked up the brunt of the Crown’s bill, than to the United States before the progressive income tax. To a policy wonk it may seem absurd to bring up feudalism in a discussion of taxes, but the comparison is more appropriate than it might seem. “Regressivity” is usually used to describe a state revenue source which exacts a larger proportion of a poor person’s income than that of a rich person. However, many common state revenue sources—like excise taxes on cigarettes and the lottery—go farther than this; they take a larger absolute amount from the poor than the well-off, while other kinds of tax relief programs give businesses industrial parks and factory buildings at outrageous discounts.

Despite Chicago’s vast ghettos, the poor here are easy to forget. Wealth is everywhere, as immanent and unreachable as the spires of the Loop seem from the South Side—a fairy city, hovering forever out of reach. Money hangs over the city like an unfulfilled promise, beckoning in the department stores, the glass skyscrapers, the taxicabs, a whiff of expensive perfume. “Get from Grand Boulevard to Easy Street,” read a lottery advertisement put up in one of Chicago’s poorest neighborhoods a few years ago. “This could be your ticket out.” Lottery stories sometimes eat up fifteen minutes of a half-hour news program; the ubiquitous pot of Illinois State Lottery gold at the end of a rainbow sits in the window of liquor stores all over the South Side. The message blares from the newspapers that print winning numbers, “hot” numbers, “overdue” numbers, from the hysterical screams of winners on TV. Anyone can be a millionaire. You gotta play to win. Everybody gets another chance.

A chance for what? Lottery marketing firms—which make millions from state contracts—devise scenes of wealth so surreal that they could be Donald Trump’s nightmares. An ad on the New York City subway a couple of years ago showed a throne room in an island mansion, the turquoise waves of some tropical sea visible through a window behind a velvet throne; a middle-aged man in tattered bathrobe with glasses and slippers sat reading the paper while a small poodle stood at attention before him, a peculiar mixture of suburbia and imperial Russia. But at Chicago’s Kimbark Liquors, a little Hyde Park establishment that sells 2,700 tickets the day before a $20 million drawing, the purchasers don’t seem to be thinking about waiting poodles. “It’s just a dream, something to think about before you fall asleep, something to take your mind off its everyday hassles,” says Larry, a salesman at Kimbark. What people think of when they play the lottery doesn’t seem to be the fancy cars, the racks of CDs, the fabulous new house, the private jet; not the freedom that comes with unlimited consumption, but instead the quieter comfort of financial security, a security that is no longer obtainable through work. A middle-aged man at Kimbark who plays twenty dollars worth of tickets every day says that if he wins he’ll go to Georgia, where it’s warm. An older woman tells me she’d just like to pay off her bills. Mike Lang, of the Illinois Lottery, says, “Winners often buy a new car, not a Ferrari but a Buick or Cadillac.” It’s not being a millionaire that people long for, it’s simply not being poor any more.

Statistically speaking, nobody ever wins the lottery. The chance of picking six random numbers out of fifty-four is one in 12,913,582. Philosophers of capitalism from Adam Smith to Milton Friedman have long been perturbed by the phenomenon of people playing a game they ought to know they can’t win. But sneering at the lottery as “a tax on the ignorant,” claiming that people who play the lottery are poor fools, deluded and uneducated, manipulated into buying false promises of wealth, fame and glory, bypasses the possibility that maybe poor people actually have a good understanding of what their life chances are; maybe lottery players are right. At issue here is not the lottery per se but the chance of personal mobility, the question of how far you can get in life by working industriously; the lottery should make sense to anyone for whom the answer is nowhere. Lottery tickets aren’t like investments in the stock market; they are tickets to a dramatically different kind of life, the kind of life you’ll never be able to save up to just by working nine to five.

In fact, the lottery is a perfectly rational investment for a person facing a lifetime of drudgery and uncertainty. The dictums of the economists—that saving can ultimately buy you a better life, that accumulation towards re-investment ought to be the practice of any rational utility-maximizer—fail to take into account that money means one thing for the rich and quite another for the poor. Poor people’s money doesn’t work right. It doesn’t save, it doesn’t accumulate, it doesn’t invest. For most people, money is simply a means to an end, a way to get food, clothing, shelter, and a little TV on the side. It gets traded in, given away, stolen, lost. Elusive and slippery, you can’t put it somewhere it will stay—like a house or a pension plan—until you can make the down payment. The working man’s purchasing power is just the boss’s variable capital, so the saying goes. Money, the form both take, is a neutral medium. To compare the cash hidden in the mattresses of the poor to the investments of the wealthy is to postulate a continuum where there is in fact a radical break.

As the historical progression from Bronzeville to Grand Crossing indicates, what makes a ghetto a ghetto is not so much a lack of money but the lack of institutions in which money can collect. With no local businesses through which to circulate, the green stuff disappears from poor neighborhoods into the cash registers of the few remaining chain supermarkets. It goes to the makers of Olde English 800, to the tobacco millionaires, the fast-food chain owners, the landlords in the suburbs, the currency exchanges. The lottery is hardly unique in siphoning money out of a poor community—compared with most businesses that “serve” the poor it looks almost innocuous. If the model for the lottery isn’t Robin Hood, it’s not quite Ronald Reagan either—it robs the poor to give to the school system. That it goes to the state is perhaps a sign of how desperate state governments are for revenue, but for the players it’s no different than other systems that suck their money away. To refer to the lottery as a swindle or a cheat on the poor ignores the basic truth about being poor, which is that you get cheated all the time.

But what else can they do? Chicago can’t move, capital can.

Yet there is a lucky winner. The lottery is a painless, if extremely narrow form of redistribution, taking money from the poor to enrich one of their own. While the lottery may, in a sense, be rational for the individual, it is clearly irrational for the class. Rather than simply manipulating ignorance, the lottery teaches a sly lesson: for people in desperate situations, fantasy is the answer. Reinforcing the message of personal mobility, lottery playing teaches that you’re on your own, that organization and politics are loser’s games. Unlike the liquor salesmen or absentee landlords, the lottery sells a vision of the future—a future imagined in terms of an unchangeable class system. The poor donate money to make one of their number rich, at which point that person and their newfound wealth pack up and move out. And the rich pay nothing for this self-containing system of political quiescence—in fact, they get a tax cut.

When people are laid off, budgets are tight, crime is rampant, and social dislocation is the norm, a microeconomic model explaining why this is the best of all possible worlds can’t be far behind. The early 1980s found a new theoretical model afoot in the antiseptic world of sociologists and political scientists which suggested that a city is not an economic unit in its own right, much less a place where people work and live, but rather a “service provider”—a place offering skyscrapers, office buildings, three-martini lunches, shoeshine boys. The earliest theorizers applied rational choice theory to urban life: people shop for cities the way one might look at a J. Crew catalogue, ultimately selecting the town with the ideal mix of services and taxes for them. Later academics contented themselves with explaining the only important thing—why cities should be prostrate and powerless vassals before the lord of corporate money. Since attracting big business to the city, where it will create jobs and pay (some) taxes, is, by definition, good for all the members of the city, it follows that all responsible city policies aim to attract private capital, with tax breaks, infrastructure, and perks like free electricity. Cities should compete for the privilege of housing the headquarters of Sears, the factories of U.S. Steel. And any microeconomist can tell you what the result of all this competition is—a better deal for the consumer.

Debates in academia rage—do “incentives” actually attract business to an area? How much do taxes matter? What does business want?—questions that business publications happily answer. The Site Selector Handbook, for example, is quite straightforward on this intricate and difficult subject; in a recent article called “Incentive Lures: Firmly Embedded in the Location Equation,” the president of a Colorado economic development council says, “I’d have to say incentives are brought up in discussions of prospects virtually 100% of the time today.” Voltaire is brought in to defend the practice: “A little evil is often necessary for obtaining a great good.” And the states and localities whip themselves into masochistic lathers to demonstrate that they provide a perfect setting for your company. “To say our state is ‘pro-business’ is a little like saying the Sistine Chapel is ‘kinda pretty,’” reads an ad for North Carolina, touting the state’s right-to-work law, its balanced budget, and its favorable bond rating. An ad for the “Gateway Area,” towns in Northern Illinois, Southern Iowa, and Northern Missouri, goes even farther, advertising the “Nordic stock” of the locals—“A Work Force that Earns Its Pay”—who, despite their Old World work ethic of “not just accepting hard work, but taking pride in it,” come for lower wages than any workers in the surrounding cities.

A state budget is a tricky thing to unpack, containing such oddities in its murky depths as a steep sales tax on illegal drugs so that drug dealers can be busted for tax evasion, and sales tax exemptions for all kinds of goodies ranging from manufacturing equipment to semen used for the artificial insemination of livestock. But a number of things are unmistakably clear about the lottery and the Illinois tax structure: the state has one of the highest sales taxes in the nation (6.25 percent) and one of the lowest income taxes (a flat tax of 3 percent; of the seven states with flat taxes, only Pennsylvania’s is lower.) The lottery, which makes up 5 percent of total state revenue, grosses about fifteen times the tax on real estate transfers ($28 million a year), about five times the tax on corporate franchises ($93 million a year), and is gaining apace on the corporate income tax ($851 million a year.) In fact, total state revenue from all forms of gambling—riverboats, the racetrack, Bingo and the lottery—now exceeds the corporate income tax, at $864 million a year. (“A tantalizing source of revenue,” reads a brochure from the Comptroller’s office.) Considering the lottery and, additionally, the variety of other revenue sources which fall predominantly on the poor—steep taxes on cigarettes, on liquor, and sales taxes—it seems evident that Illinois wants to increase taxes on working-class people, while easing up on corporations and their rich employees. But what else can they do? Chicago can’t move, capital can. Rather than enact new income taxes, Illinois’s politicians have decided to soak the poor.

While urban governments kow-tow to capital, local property owners have staged semi-revolts at any hint of increased property taxes, leaving cities and states with a vacuum where there should be revenue. Public goods and services are needed to attract businesses and investors, and cities compete to undercut each other, each offering a better deal, lower taxes, more freebies, more docile workers. The “populist”-conservative ethic of personal responsibility and lower welfare payments dovetails nicely with the businessman’s dream of a “flexible” labor market and a proliferation of low-wage workers—workers whose pockets can also be picked, at least in the short run, to make up for dwindling state coffers. The only thing cities have plenty of these days is poor people. And the lottery is a way of exploiting that human resource, the one taxable group in a state that won’t move out and whose numbers are growing.

A British academic named Barbara Goodwin has written extensively about an imaginary “just society” which is organized around a mechanism called the Total Social Lottery. The lottery, held every five years, will determine which job you have, where you live, who has children, who governs. Every citizen will receive a basic social minimum—food, health care, a place to live—and all other income will be randomly redistributed every five years in Lifestyle Packages, which include random amounts of cash. The first question my friends in the primitive 1990s have about this society is not about its instability or lack of flexibility, but is whether they would have to be treated by an untrained dentist every five years. While it’s similar to the kind of fantasy kids dream up in the backseat during a long car ride, Goodwin’s Utopia sheds a little light on our own “meritocratic” society and the dozens of belief-systems, from Andrew Carnegie’s benevolent social Darwinism to the ramblings of Murray and Herrnstein, which it has spawned in self-defense. The basic assumptions Goodwin makes about the lack of connection between the social importance of work and the size of one’s income may not be so far from the mark. After all, the function of many jobs may have more to do with discipline and profit-making than with the social importance of the work itself; people who work at McDonald’s don’t make hamburgers as much as they make money for the people who own the fast-food chain.

The social philosophy played out in the daily drama of the lottery maintains that nobody deserves to be a millionaire. As in Goodwin’s imaginary system, lottery players demonstrate a cunning awareness that wealth is little more than the luck of the draw. There’s a strong tendency among lottery players to use numbers which have personal or numerological meaning, which are invariably random numbers in genesis—birthdays, for example, are perhaps the most random numbers of all. Numbers can have occult meanings as well—for example, 769 equals death, which for some reason makes it a lucky number. Images in dreams have numerical meaning; “abdomen” is 28-33-54, according to some dream-book publications, and “accident” is 4-31-50 if you witness one, 1-37-50 if you’re in one. Other players seek order in absolute randomness; thousands of Illinois players let the Quick-Pick random-number generator pick their numbers for them. The world is moved by strange forces, irrational passions, dreams, and the randomness of birth, and wealth is largely a matter of chance, luck and the uncontrollable variable of life-choices dictated by who your parents are. While this emphasis on the blind hand of fate which causes some people to be born rich and others poor, may obscure the logic of a social system which keeps them that way, it poses a direct challenge to any perceived link between wealth and morality, between intellect and income, between productive power and money.

The peasants pay taxes while the noblemen joust; the unproductive economy feeds off an abundance of frustrated hopes. Instead of coming to grips with the harsh realities of poverty and urban decay, our empty cities exist in a hazy dream of riches. The lottery doesn’t solve the problems of the city or cure the plight of the poor, and the lottery’s fog of fantastical riches can’t survive forever in the harsh reality of ghetto life—which, if nothing else, may mean that someone else will have to subsidize the school system. The answer lies in the very bond the lottery tries hardest to break—the bond of solidarity, whether of class, neighborhood, or, finally, among cities. Imagine a kind of union of cities, a political unit which refused to compete for corporate relocation, instead working as a group to lay down terms for business—adequate wages for workers, laws mandating that a company remain in a given location for a specified number of years, consideration for the urban environment—rather than allowing business to lay down terms for them. The ideology of the lottery is the ideology of competition, in which each man is for himself and only one wins. Yet the only way cities can hope to win in the future is through solidarity. To get from Grand Crossing to Easy Street, cities will have to do better than the lottery—it’s a loaded gamble, a fixed game, a bet which only capital can win.

Kim Phillips-Fein's most recent book is Fear City: The New York City Fiscal Crisis and the Rise of the Age of Austerity. She teaches history at the Gallatin School of Individualized Study at New York University.